Cisco and Juniper Alter the Networking Landscape

Analysis: Why this week's news from Juniper and Cisco will change the face of networking for the next decade.

Analysis:
Like two heavyweight prizefighters slugging it out in a title match, networking colossus Cisco and challenger Juniper Networks traded monumental announcements this week in their battle for the multi-billion-dollar switch market.

Make no mistake about it, the new product announcements from Cisco (for its NX-7000) and from Juniper (for its EX-series switches) are big news in the networking world. There is no question that as demand continues to increase for Internet bandwidth, Cisco and Juniper each want to be the vendor of choice to help meet it.

To add to the stakes, it's important to remember that the networking business is one that has typically experienced long product cycles. As a result, the new products from Cisco and Juniper may well help to shape the face of networking for the next five to ten years, or longer.

For Cisco, the NX-7000 represents a new platform shift toward a fully 10-Gigabit Ethernet (10 GbE)-optimized switching infrastructure. It also marks the first major new switching platform from Cisco since the first Catalyst debuted some twenty years ago.

For Juniper, the EX switch portfolio marks the entry of Juniper into the switch business itself. At long last, Juniper can now claim that it has an end-to-end portfolio -- from big routers to big switches to security and everything in between.

In the switch market, particularly, much is up for grabs. A recent market forecast from research firm Dell'Oro Group reported that the Ethernet switch market was worth $18.1 billion in 2007 and is expected to hit $21.8 billion in 2012.

A key driver of Ethernet switch growth is the need for higher speeds, such as 10 GbE and greater. Both vendors also claim that their respective platforms will be ready for 100 GbE, which is the next major shift for the networking market. The technology is expected to begin rolling out in late 2009 or early 2010 as the standard is ratified.

While the networking space is rife with vendors who claim to rival Cisco, the reality is that few have the scale to compete successfully across an entire networking infrastructure play.

In my experience when briefing with Cisco, I'll ask about competitors (or there is already a competitive slide in their deck.) More often than not, Cisco will name Juniper.

Certainly Foundry, HP Procurve and Nortel are all viable competitors in the networking space as well. Yet none of them to date have really challenged Cisco in the core routing business, which is where Juniper continues to gain share.

Juniper's T1600 multi-terabit router offers some real competition to Cisco's flagship CRS-1, AKA "Huge Fast Router". The reality is that big routers need big switches, and I'd suspect that, typically, many networking buyers will choose to acquire both routers and switches from the same vendor.

The day that Juniper made its announcement, I also got some comments from Nortel, who said it welcomed Juniper's entry into the switch business. A Nortel spokesperson noted that the announcement shows that customers are demanding choice other than Cisco, which Juniper and Nortel can offer.

The spokesperson added that the Juniper announcement also validates Nortel's position that the market is moving toward converged solutions. Yet according to Nortel, enterprise data is a two-horse race -- Nortel and Cisco are it, while Juniper is late out of the gate.

While Juniper is likely to disagree strongly with Nortel's assessment, the simple reality is that Juniper is doing well financially and is growing overall share at a rapid rate. As a result of this and its move into the switch business, along with Cisco, it's poised to be one of the two companies setting the pace.

Fundamentally, success in the new networking environments is about end-to-end speed with a complete infrastructure portfolio. The move toward 10GbE and more importantly, 100GbE-capable networking infrastructure, is critical to enterprises' continued growth and stability, since they need speed to compete in the global economy.

Regardless of who ultimately triumphs, the high-profile, big-dollar announcements from Cisco and Juniper no doubt will serve to expedite the move to increased speeds. They will also raise awareness in networking groups around the globe that a faster world for data is coming soon.